Finalisation of resolutions relating to Audit Outcomes of municipalities in the Western Cape for the 2021/22 financial year

Meeting report

Chairperson's opening remarks

The Chairperson asked the Committee to take a moment of silence to meditate on what was happening in the Western Cape.

The Committee would finalise the resolutions arising from the oversight visit to the Kannaland, Beaufort West and Laingsburg municipalities situated in the Central Karoo District Municipality and the Garden Route District Municipality. He assumed that Mr Johannes Coetzee, Procedural Officer, had sent the correspondence inviting Committee Members to forward their resolutions. The Committee was further invited to add to the existing resolutions, or to omit any suggestions already made.

Oversight visit resolutions

The Committee’s formulated possible resolutions following the oversight visit to Kannaland, Beaufort West and Laingsburg municipalities on 24 to 26 July were as follows:

• Municipalities would provide the Committee with copies of Local Economic Development (LED) strategies.
• The Department of Local Government (DLG) and Provincial Treasury (PT) would provide the Committee with the dates and agenda of the envisaged meetings to support those municipalities.
• Quarterly feedback would be made by the DLG and PT on the progress made regarding the various support plans. 
• The PT would provide the Committee with a copy of the financial recovery plan (FRP).
• The Committee would be provided with the name of the audit committee members at the three municipalities.
• The Beaufort West municipality would provide the Committee with a list of its creditors.

Discussion

Ms C Murray (DA) said a request should be made to the Department of Treasury for more information on the Municipal Standard Chart of Accounts (mSCOA) and the information communication technology (ICT) support and capacitation that was being provided to the municipalities. The Department of Treasury had said the Auditor-General of South Africa (AGSA) could not audit any information because the output from their ICT system or the data strings had generated, which meant that the financial information provided was incorrect. What was the Department of Treasury doing to capacitate the ICT systems of municipalities? Could the Department of Treasury provide more information on the mSCOA, as it was a pivotal component?

Mr Carl Punt, City of Cape Town Councillor and member of the South African Local Government Association (SALGA), asked if the Committee would prefer the information on the mSCOA and the ICT support to be forwarded to them, or if the PT should be requested to brief the Committee on those matters.

The Chairperson suggested that the Committee invite the PT to brief the Committee and also look into the challenges faced, especially by the smaller municipalities, to ensure that the data incorporated into the mSCOA was accurate.

Ms Murray supported the Chairperson’s suggestion, and placed emphasis on the operating expenditure versus the capital expenditure and the under-expenditure of capital expenditure. She acknowledged that there was a lot of regulatory red tape around how capital expenditure could be spent. Perhaps more information could be provided on the red tape around how the capital expenditure budget could be spent in an underfunded budget, which would aid the Committee in understanding why the budget was not being spent, especially since the capital expenditure budget was quite minimal compared to the operating expenditure budget.

Ms M Maseko (DA) asked if the Committee could have a meeting about the municipalities that paid excessive amounts to councillors, and find the existing loopholes on the issue. Seemingly, the current interventions put in place did not give any direction on what actions needed to be implemented. If a directive existed, what was the consequence management for recovering the funds that were not supposed to be paid to the councillors? The existing loophole needed to be addressed. While the Committee has previously addressed the matter, the annual results of municipalities have reported the same issue year after year. The Committee needed to have at least one issue that was permanently addressed. In addressing the issue, who could the Committee engage with? Would the DLG assist in empowering the Committee and the municipalities, or did the Committee have to interact with National Treasury to address the matter?

Mr Coetzee proposed that the Committee interact with the DLG first. He said Ms Maseko’s point would be included in the resolutions.

Mr C Dugmore (ANC) said he was happy with the report and Ms Maseko’s inputs. He suggested that the Committee conduct a similar exercise in the Cederberg and Matzikama municipalities, as it was quite useful.

The Chairperson said Mr Dugmore’s request was noted and would be deliberated at a later stage.

He said the Committee had previously raised the issue of the effectiveness of Municipal Public Accounts Committees (MPACs) in ensuring that municipalities were able to detect fruitless and wasteful expenditures. Perhaps the Committee should ask the PT and SALGA to brief the Committee on the work it did, what was expected from the MPACs within the municipalities, whether they were fully capacitated, and if they were section 79 appointees or full-time appointees.

Ms Maseko said the Committee should not impose its resolutions but rather, with SALGA taking the leading role,  partner with the MPACs. SALGA should be requested to communicate and organise an engagement with all the MPACs and invite stakeholders like the AGSA so that they understand the responsibility of being part of the spirit of good cooperative governance. The Committee’s previous interactions with the MPACs had been ineffective because they had come across as critical, which was not what the Committee wanted. The Committee aimed to assist in addressing issues, form close partnerships, and be just a phone call away to assist where needed.

The Chairperson agreed with Ms Maseko’s statement, and said he did not want the Committee to appear "to know it all," because the Committee’s duty was to provide support where needed. The SALGA should lead the engagement where the Committee, AGSA and the PT ensured that the MPACs duly performed their duties, and would subsequently outline what the Committee needed to do to strengthen the MPACs.

Mr Coetzee said he had noted the resolutions, and would formulate them for adoption in the next meeting.

Committee matters

The Committee collectively considered and adopted all previous minutes.

In the second quarter, the Committee had postponed only one meeting scheduled for 23 May due to a cyber attack. The Committee considered and adopted its second quarter activities report.

Mr Gert Combrink, Provincial Executive Committee (PEC) member, SALGA, said SALGA would facilitate and coordinate an engagement with the Committee on local government, MPACs, the Provincial Treasury, AGSA and the DLG. The date of the meeting would be communicated.

Mr Coetzee said he would liaise with Mr Loyiso Njamela, Advisor: Governance, SALGA, to determine a mutual date for the engagement, as the Committee’s diary was congested and it had limited dates available in its programme.

Mr Nkosinathi September, Programme Manager: Municipal Finance, SALGA, forwarded the Association's apology for not attending the Committee’s engagement with the Kannaland, Beaufort West and Laingsburg municipalities. SALGA had had its commitments with the three municipalities on the same day, and thus its representatives could not be released to attend the Committee’s engagement.

The Chairperson said the Committee would liaise with SALGA over future municipal engagements and collectively determine a mutual date for an engagement. It was important for SALGA representatives to attend those meetings because the information discussed would need to be communicated with its members.

Ms Maseko said the Committee had limited days for the engagements. Engagements with other municipalities were important and needed to be held if the Committee had the time. Perhaps the Committee needed to visit the districts instead of the individual municipalities, and invite major municipalities to those engagements to deliver their presentations, which would ultimately reduce the time spent visiting individual municipalities.

The meeting was adjourned.